THE OFFSHORE AREAS MINERAL (DEVELOPMENT AND REGULATION) ACT, 2002 
___________ 

ARRANGEMENT OF SECTIONS 
___________ 

CHAPTER I 

PRELIMINARY 

SECTIONS 

1.  Short title and commencement. 
2.  Declaration as to expediency of Union control. 
3.  Application. 
4.  Definitions. 

CHAPTER II 

GENERAL PROVISIONS FOR ACQUISITION OF OPERATING RIGHTS IN THE OFFSHORE AREAS 

5.  Reconnaissance, exploration or production to be under permit, licence or lease. 
6.  Grant of operating right. 
7.  Termination of operating right. 
8.  Reservation of areas. 
9.  Power of close areas. 
10.  Availability of areas for grant of permit, licence or lease. 
11.  Grant of reconnaissance permit. 
12.  Grant of exploration licence. 
13.  Grant of production lease. 
14.  Period of commencement of operating rights. 
15.  Power of Central Government to authorise survey, research and scientific investigations in areas 

covered under operating rights. 

16.  Royalty. 
17.  Fixed rent. 
18.  Contribution towards International Seabed Authority. 
19.  Safety of persons and property. 
20.  Prevention and control of pollution and protection of marine environment. 
21.  Power of Central Government and administering authority to issue directions. 

CHAPTER III 

POWER OF ENTRY, INSPECTION, SEARCH AND SEIZURE 

22.  Power of entry, inspection, search and seizure. 

CHAPTER IV 

OFFENCES 

23.  Offences. 
24.  Offences by companies. 
25.  Place of trial. 
26.  Previous sanction of Central Government for prosecution. 
27.  Offences triable by Court of Session. 

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CHAPTER V 

CIVIL LIABILITY AND ADJUDICATION 

SECTIONS 

28.  Civil liability and adjudication. 

CHAPTER VI 

MISCELLANEOUS 

29.  Extension of enactments to offshore areas. 
30.  Compounding of offences. 
31.  Recovery of certain sums as arrears of land revenue. 
32.  Delegation of powers. 
33.  Protection of action taken in good faith. 
34.  Appeals. 
35.  Power to make rules. 
36.  Relaxation in specific cases. 
37.  Persons to be public servants. 
38.  Removal of difficulties. 

THE FIRST SCHEDULE. 

THE SECOND SCHEDULE. 

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THE OFFSHORE AREAS MINERAL (DEVELOPMENT AND REGULATION) ACT, 2002 

ACT NO. 17 OF 2003 

[30th January, 2003.]  

An Act to provide for development and regulation of mineral resources in the territorial waters, 
continental shelf, exclusive economic zone and other maritime zones of India and to provide 
for matters connected therewith or incidental thereto. 

BE it enacted by Parliament in the Fifty-third Year of the Republic of India as follows:— 

CHAPTER I 

PRELIMINARY 

1.  Short  title  and  commencement.—(1)  This  Act  may  be  called  the  Offshore  Areas  Mineral 

(Development and Regulation) Act, 2002. 

(2)  It  shall  come  into  force  on  such  date1  as  the  Central  Government  may,  by  notification  in  the 

Official Gazette, appoint. 

2. Declaration as to expediency of Union control.—It is hereby declared that it is expedient in the 
public interest that the Union should take under its control the regulation of mines and the development of 
minerals in offshore areas to the extent herein after provided. 

3. Application.—(1) This Act shall apply to all minerals in the offshore areas including any mineral 
prescribed by notification under clause (g) of sub-section (1) of section 2 of the Atomic Energy Act, 1962 
(33 of 1962) except mineral oils and hydrocarbons related thereto. 

(2) Except as otherwise provided in this Act, the provisions of this Act shall be in addition to, and not 

in derogation of, any other law for the time being in force in the offshore areas. 

4. Definitions.—In this Act, unless the context otherwise requires,— 

(a) “administering authority” means an authority notified, in the Official Gazette, by the Central 

Government for the purposes of this Act; 

(b) ''atomic minerals” means the minerals included in atomic minerals specified in Part B of the 

First Schedule to the Mines and Minerals (Development and Regulation) Act, 1957 (67 of 1957); 

(c)  “Coast  Guard”  means  the  Coast  Guard  constituted  under  the  Coast  Guard  Act,  1978                           

(30 of 1978);  

(d) “exploration licence” means a licence granted under section 12; 

(e) “exploration operation” means any operation undertaken for the purpose of exploring, locating 

or proving the mineral deposits; 

(f) “holder”, in relation to any operating right, means the lessee, licensee or permittee, as the case 

may be, in respect of such operating right; 

(g)  “hydrocarbon”  means  very  large  group  of  chemical  compounds  composed  of  carbon  and 

hydrogen; 

(h) “Indian national” means a citizen of India and includes a firm or other association, if all the 

members of the firm or, as the case may be, the members of the association, are citizens of India; 

(i) “lessee” means the person in whose name the production lease is granted; 

(j) “licensee” means the person in whose name the exploration licence is granted; 

(k) “mine” means any place in the offshore area wherein any exploration or production operation 
is carried on, together with any vessel, erection, appliance, artificial island or platform and premises 
in  the  offshore  area  used  for  the  purposes  of  exploration,  winning,  treating  or  preparing  minerals, 
obtaining or extracting any mineral or metal by any mode or method, and includes any area covered 
by an exploration licence or production lease where exploration or production operation has been, or 
is being, or may be, carried on under the provisions of this Act; 

1. 15th January, 2010, vide notification no. S.O. 338(E), dated by 11th February, 2010, see Gazette of India, Extraordinary,                

Part II, sec. 3(ii). 

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(l) “mineral” includes all minerals except mineral oil and hydrocarbon resources relating thereto; 

(m) “mineral oil” includes natural gas and petroleum; 

(n) “offshore area” means the territorial waters, continental shelf, exclusive economic zone and 
other  maritime  zones  of  India  under  the  Territorial  Waters,  Continental  Shelf,  Exclusive  Economic 
Zone and Other Maritime Zones Act, 1976 (80 of 1976); 

(o)  “operating  right”  means  the  right  of  holder  of  a  reconnaissance  permit,  or  an  exploration 

licence, or a production lease; 

(p) “permittee” means the person in whose name the reconnaissance permit is granted; 

(q)  “pollution  of  offshore  environment”  means  the  introduction  by  any  person,  directly  or 
indirectly, of substances or energy into the offshore environment which results, or is likely to result, 
in deleterious effect on living resources and marine life, hazards to human health, hindrance to marine 
activities, including fishing and other legitimate uses of the offshore areas and impairment of quality 
of sea water for use and reduction of amenities; 

(r) “prescribed” means prescribed by rules made under this Act; 

(s)  “production  operation”  means  any  operation  undertaken  for  the  purpose  of  winning  any 
mineral from the offshore area and includes any operation directly or indirectly necessary there for or 
incidental thereto; 

(t) “production lease” means a lease granted under section 13 which confers an exclusive right for 

the purpose of undertaking production operation; 

(u)  “reconnaissance  operation”  means  any  preliminary  geo-scientific  survey  undertaken  for  the 

purpose of searching or locating mineral deposits; 

(v)  “reconnaissance  permit”  means  a  permit  granted  under  section  11  for  the  purpose  of 

undertaking reconnaissance operation;  

(w) “vessel” includes any ship, boat, sailing vessel or any other vessel of any description. 

CHAPTER II 

GENERAL PROVISIONS FOR ACQUISITION OF OPERATING RIGHTS IN THE OFFSHORE AREAS 

5.  Reconnaissance,  exploration  or  production  to  be  under  permit,  licence  or  lease.—(1)  No 
person shall undertake any reconnaissance operation, exploration operation or production operation in the 
offshore  areas,  except  under  and  in  accordance  with  the  prescribed  terms  and  conditions  of  a 
reconnaissance permit, exploration licence or production lease granted under this Act and the rules made 
thereunder: 

Provided that nothing in this sub-section shall apply to any reconnaissance  operation or exploration 
operation undertaken by the Geological Survey of India, Atomic Minerals Directorate of Exploration and 
Research, the Chief Hydrographer to the Government of India of Naval Hydrographic Office of the Indian 
Navy, the National Institute of Oceanography, the National Institute of Ocean Technology of Department 
of Ocean Development of the Government of India, or any other agency duly authorised in this behalf by 
the Central Government. 

(2) A permittee or licensee or lessee shall furnish— 

(a)  all  data,  as  the  case  may  be,  relating  to  reconnaissance  operation  or  mineral  exploration  or 
mining such as bathymetry, geomorphology, mineral distribution, anomaly maps, sections, core logs, 
location maps, plans, structures, contour maps, chemical analysis, data on current tides, waves, wind, 
other geophysical and geotechnical data and any other data collected during exploration operation or 
mining  operation,  to  the  Director-General,  Geological  Survey  of  India,  Kolkata  and  the  Controller 
General, Indian Bureau of Mines, Nagpur; 

(b)  all  information  pertaining  to  atomic  minerals  collected,  as  the  case  may  be,  during 
reconnaissance  operation  or  exploration  operation  or  mining  operation,  to  the  Secretary  to  the 
Government of India dealing with the Atomic Energy, Director-General, Geological Survey of India, 
Kolkata and the Controller General, Indian Bureau of Mines, Nagpur; 

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(c)  a  six  monthly  report  on  the  work  done  by  him  stating  the  number  of  persons  engaged  and 
disclosing in full the geological, geophysical, geochemical, geo-environmental or other valuable data 
collected by him during the period under report, to the Director-General, Geological Survey of India, 
Kolkata  and  the  Controller  General,  Indian  Bureau  of  Mines,  Nagpur  and  the  report  shall  be 
submitted within three months of the closing of the period to which it relates: 

Provided that in the case of investigations pertaining to the atomic minerals, such report shall also 

be submitted to the Secretary to the Government of India dealing with the Atomic Energy; 

(d)  a  full  report  of  the  work  done  by  him  and  all  information  relevant  to  mineral  resources 
collected by him during the course of exploration operation of the area covered by the licence within 
three months of the expiry of the licence, or abandonment of operation or termination of the licence, 
whichever is earlier, to the Director-General, Geological Survey of India, Kolkata and the Controller 
General, Indian Bureau of Mines, Nagpur and shall also give therein reasons and indicate whether the 
whole or any part of the report or data submitted by him should be kept confidential. 

(3) Notwithstanding anything contained in this Act, the Central Government may— 

(a)  authorise  seaward  artillery  practice  under  the  Seaward  Artillery  Practice  Act,  1949                      

(8 of 1949); 

(b) provide for, by notification in the Official Gazette, special measures to ensure public safety 
and  interest,  the  defence  of  India  and  civil  defence,  conduct  of  the  naval  operations  and  exercises, 
national  security  and  other  strategic  considerations  and  the  matters  connected therewith  during  war 
like conditions or otherwise. 

(4) No operating right shall be granted or renewed otherwise than in accordance with the provisions 
of  this  Act  and  the  rules  made  thereunder  and  any  reconnaissance  permit,  exploration  licence  or 
production lease granted, renewed or acquired in contravention of the provisions of this Act or any rules 
made thereunder, shall be void. 

6.  Grant  of  operating  right.—The  Central  Government  shall  not  grant  an  operating  right  to  any 

person unless such person— 

(a)  is  an  Indian  national,  or  a  company  as  defined  in  section  3  of  the  Companies  Act,                

1956 (1 of 1956) ; and 

(b) satisfies such conditions as may be prescribed: 

Provided  that  no  production  lease  for  atomic  minerals  or  prescribed  substances  may  be  granted 

without consultation with the Department of the Government of India dealing with the Atomic Energy. 

7. Termination of operating right.—(1) Where the Central Government, after consultation with the 
administering authority, is of the opinion that it is expedient in the interest of development and regulation 
of offshore mineral resources, preservation of natural environment and prevention of pollution, avoidance 
of danger to public health or communication, ensuring safety of any offshore structure or conservation of 
mineral resources, the Central Government may prematurely terminate any operating right in respect of 
any mineral in any offshore area or part thereof. 

(2) No order for premature termination of operating right under sub-section (1) shall be made except 

after giving the holder of operating right a reasonable opportunity of being heard. 

(3) Where the holder of any operating right fails to commence operation within the period specified in 
section 14 or discontinues the operation for a period of two years, the operating right shall lapse from the 
date of execution of the lease or, as the case may be, discontinuance of the operation: 

Provided that the administering authority, on an application made by the holder of operating right and 
after being satisfied that such non-commencement of operation or discontinuation thereof, is due to the 
reasons  beyond  the  control  of  the  holder  of  operating  right,  may  condone  such  non-commencement  or 
discontinuation. 

8. Reservation of areas.—(1) The Central Government may, from time to time, by notification in the 
Official Gazette, reserve any offshore area not already held under any operating right, for the purposes of  

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the Central Government and, where it proposes to do so, it shall, by notification in the Official Gazette, 
specify  the  boundaries  of such  area  and  the  mineral or  minerals  in respect  of which  such  area  shall  be 
reserved. 

(2)  The  Central  Government  may,  from  time  to  time,  by  notification  in  the  Official  Gazette, 
dereserve, any area reserved under sub-section (1), in the interest of development and regulation of the 
offshore mineral. 

9.  Power  to  close  areas.—(1)  The  Central  Government  may,  in  the  public  interest,  by  order  in 
writing and communicated to the permittee, licensee or lessee, as the case may be, close any area either in 
part  or  whole,  covered  under  any  operating  right,  for  the  preservation  of  natural  environment  and 
prevention of pollution, or to avoid danger to public health, or communication, or to ensure safety of any 
offshore structure or platform, or for the conservation of offshore mineral, or for national security  or for 
any other strategic consideration. 

(2) Any area, either in part or whole closed under sub-section (1) and included in any operating right, 
shall, from the date of such order, be deemed to be excluded for the purposes of the operating right and 
the holder of the operating right shall not undertake any operation in the area covered under such order 
from the date specified therein. 

10.  Availability  of  areas  for  grant  of  permit,  licence  or  lease.—(1)  Within  six  months  from  the 
date of commencement of this Act, and subsequently at such times as may be considered necessary in this 
behalf by the administering authority, it shall, by notification in the Official Gazette, declare the parts of 
the  offshore  areas  which  shall  be  available  for  grant  of  reconnaissance  permit,  exploration  licence  or 
production lease. 

(2) Any application for the grant of reconnaissance permit, exploration licence or production lease in 
respect  of  any  area  not  covered  by  a  notification  issued  under  sub-section  (1)  shall  be  deemed  to  be 
premature and no application shall be entertained therefor. 

(3)  Operating  rights  shall  be  granted  in  standard  block  of  five  minutes  longitude  by  five  minutes 

latitude and such grant may cover more than one standard block which shall be contiguous. 

11.  Grant  of reconnaissance  permit.—(1) The  administering  authority  may  grant  a  non-exclusive 

reconnaissance permit to any person eligible under section 6 for grant of operating right. 

(2) The period for which a reconnaissance permit may be granted under sub-section (1) shall be for a 

period specified in such permit which shall not exceed two years. 

(3) A reconnaissance permit granted under sub-section (1) may be renewed for a period not exceeding 
two  years  if,  after  a  review  of  the  progress  made  during  the  period  of  such  grant,  the  administering 
authority is satisfied that a further period is necessary to complete the reconnaissance operation.  

(4) The area that  may  be granted  under  one reconnaissance  permit  shall  not exceed  a  block  of two 

degree latitude by two degree longitude. 

(5) The administering authority may grant reconnaissance permits to more than one person in respect 

of the same area for the same mineral deposits in the interest of offshore mineral development. 

12. Grant of exploration licence.—(1) The administering authority may grant an exploration licence 

to any person who— 

(a) is eligible under section 6 for grant of operating right; 

(b)  produces,  to  the  satisfaction  of  the  administering  authority,  evidence  that  such  person 
possesses  the  requisite  technical  ability  and  financial  resources  to  undertake  exploration  operation 
based on such scientific parameters, as may be prescribed; 

(c) submits a work programme for the area applied for, prepared in such manner and supported by 
such  data  as  may  be  prescribed,  setting  forth  the  activities  proposed  to  be  carried  out  during  the 
period of the exploration licence including the intended exploration schedule and methods to be used, 
an estimated schedule of expenditure, measures to prevent pollution and protect the environment and 
to  monitor  the  effectiveness  of  environmental  safeguards  subject  to  the  modifications  which  the 
administering authority may make in such work programme; 

(d) undertakes not to deviate from the work programme for exploration licence approved by the 

administering authority; and 

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(e) has fulfilled, to the satisfaction of administering authority, all his statutory obligations under 

any operating right previously— 

(i) granted; or  

(ii) transferred in the prescribed manner, 

to him. 

(2) The administering authority may, if there is any reasonable cause to believe that any person, to 
whom  an  exploration  licence  has  been  granted,  has  violated  any  undertaking  given  under  clause  (d)  of 
sub-section (1), terminate the exploration licence.  

(3) All applications for the grant of exploration licence received within the prescribed time and which 
satisfy  the  conditions  specified  in  sub-section  (1)  shall  be  considered  together  and  while  making  a 
selection for the grant of exploration licence, the administering authority shall follow the procedure given 
below, namely:— 

(a) where only one application is received in respect of an area, the administering authority may 

grant the exploration licence to the applicant; 

(b) where two or more applications are received in respect of the same area or substantially the 

same area, the order of preference shall be as follows, namely:— 

(I) preference shall be given to an applicant who requires the mineral for use in an industry 

either already owned by the applicant or who has taken sufficient steps to set-up such industry: 

Provided that where there are more than one application of such category, the administering 

authority may grant licence based on a comparative evaluation of the— 

(i) nature, quality and experience of the technical personnel employed by the applicant; 

(ii) financial resources of the applicant; 

(iii) nature and quantum of the exploration work proposed by the applicant; and 

(iv)  nature,  quality  and  quantum  of  data  submitted  along  with  the  programme  of 

exploration; 

(II) in case of other applicants, not covered under sub-clause (I), the administering authority 
may grant licence based on a comparative evaluation of matters stated in items (i) to (iv) of the 
proviso to sub-clause (I).  

(4) The period for which an exploration licence may be granted shall not exceed three years. 

(5) An exploration licence granted under sub-section (1) may be renewed for a period not exceeding 
two years if, after a review, the administering authority is satisfied that the licensee has been conducting 
the  exploration  operation  in  accordance  with  the  work  programme  approved  by  the  administering 
authority  regarding  such  licence  and  longer  period  of  renewal  of  the licence  is considered  necessary  to 
enable the licensee to complete exploration.  

(6) The area that may be granted under exploration licence shall not exceed a block of thirty minutes 

latitude by thirty minutes longitude: 

Provided that if the administering authority is of the opinion that in the interest of the development of 
any mineral, it is necessary so to do, it may, for reasons to be recorded in writing, permit any person to 
acquire an area in excess of the area specified in this sub-section. 

13.  Grant  of  production  lease.—(1)  The  administering  authority  shall  grant  a  production  lease  to 

any person who— 

(a) is eligible under section 6 for grant of operating right; 

(b)  produces,  to  the  satisfaction  of  the  administering  authority,  evidence  that  such  person 
possesses  the  requisite  technical  ability  and  financial  resources  to  undertake  production  operation 
based on such scientific parameters as may be prescribed; 

(c) submits a work programme for the systematic development of the mineral deposits of the area 
applied for, prepared in such manner and supported by such data as may be prescribed and obtained 
through exploration operation, setting forth the activities proposed to be carried out during the period 
of  the  lease  including  the  resources  assessment  of  the  area,  the  intended  schedule  of  commercial 
production,  methods  and  technologies  to  be  used  for  commercial  production  and  processing, 

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measures  to  be taken  to protect  the  environment  and to  monitor the  effectiveness  of  environmental 
safeguards; 

(d)  undertakes  not  to  deviate  from  work  programme  for  production  lease  approved  by  the 

administering authority; and 

(e)  has  fulfilled,  to  the  satisfaction  of  the  administering  authority,  all  the  statutory  obligations 

under any operating right previously— 

(I) granted; or  

(II) transferred in the prescribed manner, 

to him: 

Provided  that  a  licensee  shall  have  the  exclusive  right  to  a  production  lease  over  such  part  of  the 
offshore  area  covered  by  his  exploration  licence  as  he  may  desire  subject  to  the  condition  that  the 
administering authority is satisfied that the licensee— 

(i) has undertaken exploration operation to establish mineral resources in such offshore area;  

(ii) has not committed any breach of the terms and conditions of the exploration licence; and 

(iii) has not become ineligible under the provisions of this Act. 

(2) The administering authority may, if there is any reasonable cause to believe that any person, to 

whom  a  production  lease  has  been  granted,  has  violated  any  undertaking  given  under  clause  (d)  of               
sub-section (1), terminate the production lease. 

(3) The period for which a production lease may be granted shall not exceed thirty years. 

(4)  A  production  lease  granted  under  sub-section  (1)  may  be  renewed  for  a  period  not  exceeding 
twenty years, if, after a review, the administering authority is satisfied that the lessee has been conducting 
the  production  operation  in  accordance  with  the  work  programme  approved  by  the  administering 
authority regarding such lease. 

(5) The area under a production lease shall not exceed a block of fifteen minutes latitude by fifteen 

minutes longitude: 

Provided that if the administering authority is of the opinion that in the interest of the development of 
any mineral, it is necessary so to do, it may, for reasons to be recorded in writing, permit any person to 
acquire an area in excess of the area specified in this sub-section. 

14.  Period  of  commencement  of  operating  rights.—A  holder  of  operating  right  shall  commence 
operation  within  the  period  specified  below  after  the  grant  of  the  operating  right  and  shall  thereafter 
conduct such operation in proper, skilful and workman-like manner, as follows:— 

(a) reconnaissance permit 

(b) exploration licence 

(c) production lease 

— 

— 

— 

six months;  

one year; and  

two years. 

15. Power of Central Government to authorise survey, research and scientific investigations in 
areas covered under operating rights.—Any person or agency authorised by notification in the Official 
Gazette, by the Central Government in this behalf, may conduct survey, research, diving operations and 
scientific investigations in the offshore areas, including any area covered under operating rights and the 
permittee, licensee or lessee, as the case may be, shall permit such person or agency to undertake the said 
investigations in their respective areas and to render such assistance as may be necessary for conduct of 
the investigations. 

16.  Royalty.—(1)  A  lessee  shall  pay  royalty  to  the  Central  Government  in  respect  of  any  mineral 
removed or consumed by him from the area covered under the production lease, at the rate for the time 
being specified in the First Schedule in respect of that mineral. 

(2) The Central Government may, by notification in the Official Gazette, amend the First Schedule so 
as to enhance or reduce the rate at which royalty shall be payable in respect of any mineral with effect 
from such date as may be specified in the notification: 

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Provided that the Central Government shall not enhance the rate of royalty in respect of any mineral 

more than once during any period of three years. 

17. Fixed rent.—(1) A lessee shall pay to the Central Government, every year, fixed rent in respect 
of  the  area  covered  under  the  production  lease,  at  the  rate  for  the  time  being  specified  in  the  Second 
Schedule: 

Provided  that  where  the  lessee  becomes  liable  under  section  16  to  pay  royalty  for  any  mineral 
removed or consumed by him from the area covered under such lease, he shall be liable to pay either such 
royalty or the fixed rent in respect of that area, whichever is greater. 

(2) The Central Government may, by notification in the Official Gazette, amend the Second Schedule 
so  as  to  enhance  or  reduce  the  rate  at  which fixed rent  shall  be  payable in respect  of  any  area covered 
under a production lease and such enhancement or reduction shall take effect from such date as may be 
specified in the notification: 

Provided  that  the  Central  Government  shall  not  enhance  the  rate  of  the  fixed  rent  more  than  once 

during any period of three years. 

18.  Contribution  towards  International  Seabed  Authority.—Every  lessee,  whose  production 
operation  extends  beyond  two  hundred  nautical  miles  from  the  baseline  from  which  the  breadth  of  the 
territorial sea is measured, shall pay in advance, in addition to other payments required under this Act, to 
the Central Government, the amount to be paid to the International Seabed Authority towards fulfilment 
of obligation of the Central Government under Article 82 of the United Nations Convention on Law of 
the Sea, 1982. 

19.  Safety  of  persons  and  property.—(1)  The  permittee,  licensee,  lessee  or  any  other  person 

undertaking  the  reconnaissance  operation  or  exploration  operation  or  production  operation  under                  
sub-section  (1)  of  section  5  or  any  agency  undertaking  the  reconnaissance  operation  or  exploration 
operation under the proviso to sub-section (1) of the said section shall be responsible to ensure that the 
concerned operation is conducted with due regard to the safety and health of persons including divers and 
safety and security of property engaged in the operation. 

(2)  The  Central  Government  may,  by  notification  in  the  Official  Gazette,  declare  safety  zones  in 
respect of offshore activities as may be necessary and prescribe the norms for regulating the safety and 
health  of  persons  and  safety  of  property  engaged  in  operations  authorised  under  this  Act,  the 
implementation thereof and matters connected therewith.  

(3) In the event of any contravention of provisions of sub-section (1) or the norms prescribed under 
sub-section  (2)  by  the  permittee,  licensee,  lessee  or  any  other  person  undertaking  the  reconnaissance 
operation or exploration operation or production operation under sub-section (1) of section 5, or any other 
agency  undertaking  the  reconnaissance  operation  or  exploration  operation  under  the  proviso  to            
sub-section (1) of the said section, shall also be deemed to be responsible for such contravention unless he 
or it proves that he or it, as the case may be, had taken all reasonable precautions within his or its means 
for enforcing those provisions, to prevent such contravention. 

20.  Prevention  and  control  of  pollution  and  protection  of  marine  environment.—(1)  Every 
holder  of  the  operating  rights  shall  carry  out  the  operations  authorised  under  this  Act  subject  to  the 
provisions of this Act and the rules made thereunder and any other law and the rules made thereunder, for 
the time being in force for the prevention and control of pollution and protection of marine environment. 

(2) Every holder of an operating right shall be liable for any pollution of, or damage to, the marine 
environment resulting from his activities relating to his operating right in the offshore areas and shall pay 
such compensation, as may be determined by the administering authority keeping in view the extent of 
pollution or damage, as the case may be. 

(3)  The  Central  Government  may  prescribe  measures  to  be  taken  for  prevention  and  control  of 

pollution and protection of marine environment due to activities in the offshore areas. 

21.  Power  of  Central  Government  and  administering  authority  to  issue  directions.—(1)  The 
permittee,  licensee  or  lessee  shall  comply  with  such  directions  as  the  Central  Government  or  the 
administering authority may issue, from time to time, for the conservation and systematic development of 
offshore  minerals,  prevention  of  pollution,  protection  of  marine  environment,  prevention  of  coastal 
erosion or prevention of danger to life or property including the marine life. 

  9 

 
 
(2) The permittee, licensee or lessee shall comply with such directions as may be issued from time to 
time by the competent authority or Coast Guard regarding national security, safety and national integrity. 

Explanation.—“competent  authority”  means  the  competent  authority  appointed  for  the  purposes  of 

sub-section (2) by the Central Government in the Ministry dealing with defence of India. 

CHAPTER III 

POWER OF ENTRY, INSPECTION, SEARCH AND SEIZURE 

22.  Power  of  entry,  inspection,  search  and  seizure.—(1)  For  the  purpose  of  ascertaining  the 
position of the working, actual or prospective, of any mine or abandoned mine, or for any other purpose 
connected with this Act or the rules made thereunder, any officer authorised, by the Central Government 
in this behalf, by general or special order, may— 

(a) enter and inspect, at all reasonable times, any mine; 

(b)  weigh,  draw  samples  or  take  measurements  of  the  stocks  of  minerals  recovered  from  any 

mine; 

(c) survey and take samples and measurements in any such mine; 

(d)  examine  any  document,  book,  register  or  record  in  the  possession  or  power  of  any  person 
having the control of, or connected with, any mine and place marks of identification thereon and take 
extracts from, or make copies of, such document, book, register or record; 

(e) order the production of any such document, book, register and record, by the person referred 

to in clause (d); and  

(f) examine any person having the control of, or connected with, any mine. 

(2)  Any  authorised officer may,  for  the purpose  of  ascertaining  whether  or  not  the  requirements  of 
this Act or any rule made thereunder have been complied with, either with, or where it is not possible to 
obtain warrant conveniently, then, without, a warrant, — 

(a) search any mine; 

(b) stop or board and search any vessel which is engaged or which is likely to be engaged in any 

activity regulated under this Act; and 

(c)  require the  person for  the  time  being  having  command  or  charge  of  mine  or  such  vessel  to 
produce any licence, permit, log book or other document relating, to the vessel or mine and examine 
or  take  copies  of  such  licence,  permit,  log  book  or  other  document,  as  the  case  may  be,  for 
ascertaining the requirements of sub-section (1).  

(3) Where the authorised officer has reason to believe that any vessel or mine has been, or is being, or 
is  about  to  be,  used  or  employed,  as  the  case  may  be,  in  violation  of  any  provision  of  this  Act  or  rule 
made thereunder, he may, with, or where it is not possible to obtain warrant conveniently, then, without, a 
warrant,— 

(a) seize and detain such vessel or mine, including any gear, equipment, stores or cargo found on 

board such vessel or belonging to the vessel and seize any mineral found on board the vessel; 

(b) seize any evidence relating to violation of any provision of this Act or rule made thereunder; 

(c)  require  the  person  for  the  time  being  having  command  or  charge  of  the  vessel,  platform  or 
erection of the mine so seized or detained to bring such vessel, platform or erection to any specified 
port; 

(d) arrest any person whom such officer has reason to believe, has committed such violation: 

Provided that the authorised officer, after arresting such person and before producing him before the 
competent  court,  shall  inform  the  administering  authority  regarding  the  arrest  and  grounds  of  arrest 
communicated to the person so arrested. 

(4) In taking any action under sub-section (3), the authorised officer may use such force  as may be 

reasonably necessary. 

  10 

 
 
 
 
(5) Where any vessel or other things are seized or detained, under sub-section (3),— 

(a) the vessel or other things so seized or detained shall, as soon as possible, be produced before 
the court competent to try an offence under this Act and the court shall make such order as it may 
deem  fit  for  the  retention  or  custody  of  such  vessel  or  things  with  the  Central  Government  or  any 
other authority pending the completion of any proceedings for the prosecution of any offence relating 
to such vessel or things, as the case may be, under this Act or rules made thereunder: 

Provided that the court may, on an application made by the owner or the person for the time being 
having command or charge of the vessel or mine, order the release of the vessel or other things so 
seized  or  detained,  to  the  owner  or  the  person  for  the  tie  being  having  command  or  charge  of  the 
vessel or mine, furnishing security in the form of cash or a bank guarantee for an amount which is not 
less than fifty per cent. of the value of the vessel or things so seized or detained; 

(b) the administering authority shall be informed by the authorised officer of such seizure and the 

details thereof. 

(6)  Where,  in  pursuance  of  the  commission  of  any  offence  under  this  Act,  any  vessel  is  pursued 
beyond the limits of the offshore area, the powers conferred on an authorised officer by this section may 
be  exercised beyond  such limits in  the  circumstances  and  to the  extent  recognised  by  international  law 
and State practice. 

(7) Every person to whom an order or warrant is issued or given by virtue of the powers conferred by 

this section shall be legally bound to comply with such order or warrant.  

Explanation.—For the purposes of this section,— 

(i)  “authorised  officer”  means  an  officer  of  the  Central  Government  notified  as  such  in  the 

Official Gazette, by the Central Government;  

(ii) “warrant” means a warrant issued by the Judicial Magistrate or the Metropolitan Magistrate, 
as  the  case  may  be,  within  whose  jurisdiction  the  place,  where  the  warrant  is  to  be  executed,  is 
situated. 

CHAPTER IV 

OFFENCES 

23.  Offences.—(1)  (a)  Whoever  undertakes  any  reconnaissance  operation,  exploration  operation  or 
production  operation in offshore  area  without  any  permit,  licence  or  lease,  as the  case  may  be,  granted 
under this Act shall be punished with imprisonment for a term which may extend to five years, or with 
fine which may extend to fifty thousand rupees, or with both. 

(b)  A  permittee,  licensee  or  lessee  who  does  not  furnish  any  data,  information  or  document  under    

sub-section (2) of section 5, in the manner provided therein, shall be punished with imprisonment which 
may extend to three years, or with fine which may extend to twenty-five thousand rupees, or with both. 

(c)  Any  vessel,  together  with  its  gear,  boats,  stores  and  cargo,  used  or  employed  in  violation  of 
section  5,  along  with  any  mineral  recovered  or  processed  in  violation  of  that  section,  if  any,  shall  be 
confiscated. 

(d)  Whoever  ships,  transports,  offers  for  sale,  sells,  purchases,  imports,  exports,  or  has  custody, 
control or possession of, any mineral recovered, processed or retained in violation of this Act or any rule 
made  thereunder  shall  be  punished  with  imprisonment  which  may  extend  to  three  years,  or  with  fine 
which may extend to three years, or with fine which may extend to fifty lakh rupees, or with both. 

(2) Whoever— 

(a) intentionally obstructs any authorised officer referred to in section 22 in the exercise of any 

powers conferred under this Act; or 

(b)  fails  to  afford  reasonable  facilities  to  the  authorised  officer  referred  to  in  section  22  or  his 
assistant to board the vessel or enter the mine or to provide for adequate security to such officer or 
assistant at the time of entry into the vessel or mine or when they are on board such vessel or mine; or  

  11 

 
 
 
 
(c)  fails  to  stop  the  vessel  or  mine  or  to  produce  the  licence,  permit,  log  book  or  any  other 
document,  as  the  case  may  be,  on  board  such  vessel,  or  mine,  when  required  to  do  so  by  the 
authorised officer referred to in section 22; or  

(d)  interferes  with,  delays,  or  prevents,  by  any  means,  the  lawful  apprehension  of  any  person 

under this Act,  

shall be punished with imprisonment for a term which may extend to five years, or with fine which may 
extend to fifty thousand rupees, or with both. 

(3) Whoever contravenes any other provision of this Act or rules made thereunder, other than those 
specified in sub-sections (1) and (2) shall be punished with imprisonment for a term which may extend to 
five years, or with fine which may extend to one crore rupees, or with both, and in the case of continuing 
contravention, with an additional fine which may extend to five lakh rupees for every day during which 
such contravention continues. 

24.  Offences  by  companies.—(1)  Where  an  offence  under  this  Act  has  been  committed  by  a 
company, every person who, at the time the offence was committed, was directly in charge of, and was 
responsible to, the company for the conduct of the business of the company, as well as the company, shall 
be  deemed  to  be  guilty  of  the  offence  and  shall  be  liable  to  be  proceeded  against  and  punished 
accordingly: 

Provided  that  nothing  contained  in  this  sub-section  shall  render  any  such  person  liable  to  any 
punishment provided in this Act, if he proves that the offence was committed without his knowledge and 
that he had exercised all due diligence to prevent the commission of such offence. 

(2) Notwithstanding anything contained in sub-section (1), where an offence under this Act, has been 
committed  by  a  company  and  it  is  proved  that  the  offence  has  been  committed  with  the  consent  or 
connivance of, or is attributable to, any neglect on the part of, any director, manager, secretary, or other 
officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty 
of that offence and shall be liable to be proceeded against and punished accordingly. 

Explanation.—For the purposes of this section,— 

(a) “company” means anybody corporate and includes a firm or other association of individuals; 

and 

(b) “director”, in relation to a firm, means a partner in the firm. 

25. Place of trial.—Notwithstanding anything contained in other law for the time being in force, any 
person committing an offence under this Act or any rule made thereunder or under any of the enactment 
extended under this Act or under the rules made thereunder shall be tried for the offence in such place as 
the Central Government may, by general or special order published in the Official Gazette, direct in this 
behalf. 

26.  Previous  sanction  of  Central  Government  for  prosecution.—No  prosecution  for  an  offence 
committed under this Act shall be instituted except with the previous sanction of the Central Government 
or such officer or authority as may be authorised by the Central Government, by order in writing in this 
behalf. 

27.  Offences  triable  by  Court  of  Session.—Notwithstanding  anything  contained  in  the  Code  of 
Criminal Procedure, 1973 (2 of 1974), all offences under this Act shall be triable by the Court of Session. 

CHAPTER V 

CIVIL LIABILITY AND ADJUDICATION 

28.  Civil  liability  and  adjudication.—(1)  A  person  to  whom  a  permit,  licence  or  lease  is  granted 

under this Act,— 

(a) contravenes the general terms and conditions imposed by the rules made under this Act shall 
be liable to pay to the Central Government an amount which shall not be less than five lakh rupees 
and which may extend to one crore rupees;  

(b)  contravenes  any  particular  terms  and  conditions  applicable  only  in  case  of  such  permittee, 
licensee or lessee as the case may be, shall also be liable, apart from the liability under clause (a), to 

  12 

 
 
pay additional amount to the Central Government which shall not be less than one lakh rupees and 
which may extend to ten lakh rupees. 

(2) No court or other authority except the authorised officer designated by the Central Government 

for  this  purpose,  shall  have  jurisdiction  to  hear  and  decide  the  cases  relating  to  clauses  (a)  and  (b)  of               
sub-section (1). 

(3)  An  officer  of  the  Central  Government  who  has  been  authorised  by  that  Government  to  file  an 
application before the authorised officer designated under sub-section (2), shall file an application against 
licensee,  lessee  or  permittee,  as  the  case  may  be,  indicating  the  civil  wrong  committed  by  him  under 
clause (a) or clause (b) of sub-section (1) in such manner as may be prescribed. 

(4) When an application is filed under sub-section (3), before an authorised officer designated under 
sub-section (2), he shall serve notice along with the copy of such application to the person, against whom 
the application  is  made, to  provide  him  an  opportunity  to  file reply  to the  application  in  the  prescribed 
manner and the authorised officer shall dispose of the case after considering the evidence produced either 
in support or in opposition to the application and after providing the opportunity of hearing. 

(5) For the purposes of this section, the authorised officer designated under sub-section (2), shall have 
the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908), while 
trying a suit, in respect of the following matters, namely:— 

(a) summoning and enforcing the attendance of any person and examining him on oath; 

(b) requiring the discovery and production of documents;  

(c) receiving evidence on affidavits; 

(d) issuing commissions for the examination of witnesses or documents; 

(e) reviewing its decisions; and  

(f) any other matter which may be prescribed. 

CHAPTER VI 

MISCELLANEOUS 

29. Extension of enactments to offshore areas.—The Central Government may, by notification in 

the Official Gazette,— 

(a)  extend  with  such  restrictions  and  modifications  as  it  thinks  fit,  any  enactment  for  the  time 

being in force in India or any part thereof to the offshore area or any part thereof; and 

(b)  make  such  provisions  as  it  may  consider  necessary  for  facilitating  the  enforcement  of  such 

enactment,  

and any enactment so extended shall have effect as if the offshore area or the part thereof, as the case may 
be, is a part of the territory of India. 

30.  Compounding  of  offences.—(1)  Any  offence  punishable  under  this  Act  may,  either  before  or 
after the institution of the prosecution, be compounded by the administering authority or any other officer 
authorised  by  the  Central  Government  with  respect  to  that  offence,  on  payment  for  credit  to  that 
Government of such sum as that administering authority or officer, as the case may be, may specify:  

Provided that such sum shall not, in any case, exceed the maximum amount of the fine which may be 

imposed under this Act for the offence so compounded. 

(2) Where an offence is compounded under sub-section (1), no proceeding or further proceeding, as 
the  case  may  be,  shall  be  taken  against  the  offender  in  respect  of  the  offence  so  compounded  and  the 
offender, if in custody, shall be released forthwith. 

31. Recovery of certain sums as arrears of land revenue.—Any licence fee, royalty, fixed rent or 
other sum due to the Central Government under this Act or rules made thereunder or under the terms and 
conditions of a reconnaissance permit, exploration licence or production lease may, on a certificate issued 
by the administering authority, be recovered in the same manner as if it were an arrear of land revenue 
and every such sum together with the interest due thereon, shall be the first charge on the assets of the 
permittee, licensee or lessee, as the case may be. 

  13 

 
 
32.  Delegation  of  powers.—The  Central  Government  may,  by  notification  in  the  Official  Gazette, 
direct that any power exercisable by it under this Act or any rule made thereunder may, in relation to such 
matter and subject to such conditions, if any, as may be specified in the notification, be exercisable also 
by such officer or authority subordinate to that Government as may be specified in the notification. 

33. Protection of action taken in good faith.—No suit, prosecution or other legal proceedings shall 
lie against any person for anything which is in good faith done or intended to be done under this Act or 
any rule made thereunder. 

34.  Appeals.—(1)  Subject  to  the  provisions  of  sub-section  (2),  any  person  aggrieved  by  an  order 
made by the administering authority or any officer under this Act or the rules made thereunder may prefer 
an appeal against such order to the Central Government. 

(2)  Every  such  appeal  shall  be  preferred  within  prescribed  period  from  the  date  on  which  the 

impugned order was made: 

Provided  that  the  Central  Government  may,  if  it  is  satisfied  that  the  appellant  was  prevented  by 
sufficient cause from preferring the appeal within such prescribed period, permit the appellant to prefer 
the appeal within a further period as may be prescribed. 

(3) On receipt of any such appeal, the Central Government shall, after giving the parties to the appeal 
a  reasonable  opportunity  of  being  heard  and  after  making  such  inquiry  as  it  deems  proper,  make  such 
order,  as  it  may  think  fit,  confirming,  modifying  or  reversing  the  order  appealed  against,  or  may  send 
back the case with such direction as it may think fit for a fresh order after taking additional evidence, if 
necessary. 

35. Power to make rules.—(1) The Central Government may, by notification in the Official Gazette, 

make rules for the purposes of this Act. 

(2) Without prejudice to the generality of the foregoing power, such rules may provide for all or any 

of the following matters, namely:— 

(a) the terms and conditions of a reconnaissance permit, exploration licence or production lease 

under sub-section (1) of section 5;  

(b) conditions for grant of operating right under clause (b) of section 6;  

(c) substances to be prescribed under proviso to section 6; 

(d)  the  requisite  technical  ability  and  financial  resources  to  undertake  exploration  operation  on 

scientific parameters under clause (b) of sub-section (1) of section 12; 

(e)  the  manner  in  which  a  work  programme  shall  be  prepared  and  the  data  by  which  the  work 

programme shall be supported under clause (c) of sub-section (1) of section 12; 

(f) the manner of transfer referred to in sub-clause (ii) of clause (e) of sub-section (1) of section 

12; 

(g) the time within which the applications under sub-section (3) of section 12 are to be received; 

(h)  the  requisite  technical  ability  and  financial  resources  to  undertake  production  operation  on 

scientific parameters under clause (b) of sub-section (1) of section 13; 

(i)  the  manner  in  which  a  work  programme  shall  be  prepared  and  the  data  by  which  the  work 

programme shall be supported under clause (c) of sub-section (1) of section 13; 

(j) the manner of transfer referred to in sub-clause (II) of clause (e) of sub-section (1) of section 

13; 

(k)  norms  for  regulating  the  safety  and  health  of  persons  and  safety  of  property  engaged  in 
operations  authorised  under  this  Act,  the  implementation  thereof  and  matters  connected  therewith 
under sub-section (2) of section 19; 

(l)  the  measures  to  be  taken  for  prevention  and  control  of  pollution  and  protection  of  marine 

environment due to activities in the offshore areas under sub-section (3) of section 20; 

(m) the manner of filing application under sub-section (3) of section 28; 

(n) the manner of filing reply under sub-section (4) of section 28; 

  14 

 
 
(o) any other matter under clause (f) of sub-section (5) of section 28; 

(p) the period within which appeal shall be preferred under, and the further period which may be 

permitted under the proviso to, sub-section (2) of section 34; 

(q) any other matter which is to be, or may be, prescribed under this Act. 

(3) Every rule made by the Central Government under this Act shall be laid, as soon as may be after it 
is made, before each House of Parliament, while it is in session, for a total period of thirty days which 
may be comprised in one session or in two or more successive sessions, and if, before the expiry of the 
session  immediately  following  the  session  or  the  successive  sessions  aforesaid,  both  Houses  agree  in 
making any modification in the rule or both Houses agree that the rule should not be made, the rule shall 
thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that 
any such modification or annulment shall be without prejudice to the validity of anything previously done 
under that rule. 

36. Relaxation in specific cases.—Notwithstanding anything to the contrary contained in this Act or 
any rule made thereunder, the Central Government may, if it is of the opinion that in the interests of the 
offshore mineral development, it is necessary so to do, by order and for reasons to be recorded in writing, 
authorise in any specific case the grant, renewal or transfer of any operating right to any person on such 
terms and conditions as it may specify in this behalf in such order. 

37.  Persons  to  be  public  servants.—The  administering  authority  or  any  other  officer  shall  be 
deemed, while acting or purporting to act in pursuance of any of the provisions of this Act, to be public 
servants within the meaning of the Indian Penal Code (45 of 1860). 

38. Removal of difficulties.—(1) If any difficulty arises in giving effect to the provisions of this Act, 
or of any of the enactments extended under section 29, the Central Government may, by order published 
in the Official Gazette, make such provisions  not inconsistent with the provisions of this Act or, as the 
case  may  be,  of  such  enactment,  as  may  appear  to  it  to  be  necessary  or  expedient  for  removing  the 
difficulty: 

Provided that no order shall be made under this section,— 

(a)  in  the  case  of  any  difficulty  arising  in  giving  effect  to  any  provision  of  this  Act,  after  the 

expiry of three years from the commencement of such provision; 

(b)  in  the  case  of  any  difficulty  arising  in  giving  effect  to  the  provisions  of  any  enactment 

extended under section 29, after the expiry of three years from the extension of such enactment. 

(2) Every order made under this section shall be laid, as soon as may be after it is made, before each 

House of Parliament. 

  15 

 
 
 
THE FIRST SCHEDULE 

[See section 16(1)] 

RATES OF ROYALTY 

1. 

2. 

3. 

4. 

Brown ilmenite (leucoxene), Ilmenite, 
Rutile and Zircon 

Two per cent. of sale price on ad valorem basis. 

Dolomite 

Garnet 

Gold 

Forty rupees per tonne. 

Three per cent. of sale price on ad valorem basis. 

One and half per cent. of London Bullion Market 
Association price (commonly referred to as 
“London Price”) chargeable on the contained gold 
metal in ore produced. 

5. 

Limestone and Lime mud 

Forty rupees per tonne. 

6.  Manganese Ore 

7.  Monazite 

8. 

Sillimanite 

9. 

Silver 

10. 

All other minerals not hereinbefore 
specified. 

Three per cent. of sale price on ad valorem basis. 

One hundred and twenty-five rupees per tonne. 

Two and half per cent. of sale price on ad valorem 
basis. 

Five per cent. of London metal Exchange price 
chargeable on the contained silver metal in ore 
produced. 

Ten per cent. of sale price on ad valorem basis. 

  16 

 
 
 
 
 
 
 
 
 
 
 
 
THE SECOND SCHEDULE 

[See section 17(1)] 

RATES OF FIXED RENT 

Rates of fixed rent in rupees per standard block per annum 

Size 

1st Year of the lease 

2nd to 5th year of 
the lease 

6th to 10th year of 
the lease 

11th year of the 
lease and onwards 

Standard block of 
5 minutes 
longitude by 5 
minutes latitude 

Nil 

Rupees 50,000 

Rupees 1,00,000 

Rupees 2,00,000 

  17 

 
 
 
 
 
